What will eventually happen with the State Pension?

[BrainInAJar]

Hello,

I recently turned 40 and have been reviewing my finances.

A lot of stuff online factors in getting the State Pension. I'm trying to be on the safe side though and factor in that I might not get it, not the full thing anyway and maybe not until a much older age than earlier generations.

Just out of interest, what do you think will happen? Will any Government be "brave" enough to make sweeping changes? How much notice will we get? Who will be the first generation, if any, not to get a state pension?

Thanks

It will be means tested because it’s massively unaffordable

private savjngs need to be supported and properly structured to make the change

this does not seem to be happening in the uk

so it be means tested but at not a particularly high rate

it will be a massive public policy failure and example of a failure of the welfare state

And when I say "not get a State Pension" I mean "not everyone who has paid enough Nat Ins will automatically be entitled to full State Pension".

Presumably there will always have to be some level of benefits for the elderly who have no other way of supporting themselves.

For those of us in our 40s (probably a lot of us on here) - what do we think the age will be? 70? 75? 80?!

The thing is that most people are doing their best at the moment to be able to afford their mortgages and their bills and food. In a lot of cases paying into a pension as well is an unaffordable luxury. People pay NICs with the expectation that this then will result in a state pension being paid to them in later years. The state retirement age is being pushed further and further away. People are going to work until they drop. People are opting out of workplace pensions because they simply cannot afford the contributions.

As long as pensioners keep voting in huge numbers then it’ll be safe.

I think if they ever stop the state pension we will know that civilised society is in decline

Without a state pension, surely the majority (or lots) of people will just be screwed?! How will people live?

But current pensioners could vote for a government that cuts future pension entitlement for the current 30 year olds.

I forgot to say, I think there absolutely will come a point where state pension age can't be raised any further. People will end up dying long before they qualify for a penny. How often do we all see instances now of friends and relatives growing older and suffering from poor health from their sixties onwards and having a real struggle to get through the last years of work before the state pension kicks in, if the SPA is raised any higher that's just going to make the problem worse and some people will be too unwell to continue working and those people then have a struggle to qualify for any form of meaningful state support.

The Government plan to increase State Pension age to raise it from 66 to 67 between 2026 and 2028. This would affect those born on or after 6 April 1960. A further increase is planned to raise the State Pension age from 67 to 68 between 2044 and 2046, but this may be brought forward.

I get mine this November age 66.
It is not a benefit.. we have worked.. we have paid our taxes.

Some are lucky to have private pensions.

@New2024 uk - other countries like Australia are doing far better

i think the state pension should be means tested - it astounds me that people don’t think they should find their own age

I very much think there should be a safety net - but it shouldn’t be paid to everyone. That’s why you get a perverse outcome such as now where wealthy people are getting state support whilst support for those in genuine need is restricted

but the problem is that it’s baked into peoples ideology in the UK and many people don’t seem to be rational about it

eg the whole “I’ve paid in” - there is no fund that is paid into - it’s paid out of the states
currwnt resources

I compare it to Australian system which is far better for private savjngs. People understand pensions far more and take responsibility far more

reliance on the state should be a needs must worst case scenario rather than a default for the entire aged population

but people will be outraged that I’ve said that

I'm 40 next month.

They raise the age every 3-4 years. It's quite deliberate to reduce the spend burden on the treasury. Its becoming too expensive - id expect a means-tested pension and eventual phase out.

If it were means tested those who earn into the 40p tax threshold would see tapered reductions until it was removed - that's the kind of thing coming I reckon.

Im fine with that, 12k/yr pension is absolute peanuts. Barely covers bills and food - if you're after a retirement of fun and travel after smashing it at work that won't cut the mustard!

Get a private one, invest properly and aim for a pension that matches your salary. Protect yourself and give yourself the freedom to retire at say 57 instead of 68.

I’m 46, so I’m looking at 68 😳
My mum is early 70’s and although fit and in good health, that would only be three or so years of no work before Dh and I were at her point in life…awful

@Moier its not funded by past payments - this is the whole flaw in the ideology of it

it comes out of the taxes paid by the current working population - there’s nothing ring fenced for it

its a state subsidy - a welfare payment - a benefit…

the core problem is that that way it is structured and funding does not reflect the rhetoric and ideology about it

To fund a £10k annual payment you’d need about £250k lump sum (roughly) - FOR EACH PENSIONER IN THE UK

We will all work till we drop, but there will still be loads of people sitting on benefits that have never work or contribute!!

Sadly as I've said a lot of people simply aren't paid well enough to be able to afford to pay into a private pension. UK citizens are taxed via NICS with the expectation of then being able to claim a state pension and have some semblance of a retirement. If the government are no longer willing to pay out for a state pension that's an utter disgrace after taxing people to the hilt for their entire working lives.

I expect to have to work for ever

That would be ideal...if people were actually able to afford to pay into a private pension. Some people can't afford it because wages are so low.

@5thCommandment But how realistic is that for most people financially? And if they only start in mid 40’s, will they be screwed?
V difficult to put any extra money back for people in the current climate, I’m very worried for the future

Exactly, agree with your post @TeaMistress

i think the state pension should be means tested - it astounds me that people don’t think they should find their own age

That’s fine @Hmmmmaybe happy to do so as long as the NICS contributions are reduced so I’m not funding everyone else’s retirement apart from my own.

The state pension won't be threatened for the foreseeable future for the simple reason that pensioners keep the Tories in power. And now that Labour is being positioned as Tory mk2 those pensioners will largely determine who gets elected. It's why pensions have continued to rise, often by more than inflation, while every other area of public spending gets cut and constantly has to justify itself against right wing propaganda.

What a farce if it’s means tested. I’ve lived frugally and done without so much so I have some savings.

@TeaMistress thar comment js what o mean by the ideology of it - this is a criticism of the ideology and not you personally

the government is not some separate entity - the state pension is paid by current tax payers. They haven’t “taken” your money. You’ve paid taxes - none of which have been put aside to find your pension

so it can only be funded by current tax payers - which is hugely unaffordable as people live longer and there are more old people than young people

as I said - to find a state pension of £10k per annum without using money from current tax payers around a £250k pot would be needed.

so the government would have had to put that much aside from the taxes that you paid in your working life. I can guarantee you wouldn’t have been happy to pay that much tax.

so it’s alll a huge smoke and mirrors that has become embedded into the uk ideology

it’s entirely possible to structure society where people can properly find their retirement with a safety net for the small minority who couldn’t

but the uk hasn’t done that and wont. It is a total
and utter public policy failure. And is largely because people believe jn this myth that the taxes they’ve paid - which have already been spent on other things and were t enough to fund this level of state pension - give them the right to a pension after they’ve stopped paying tax

If the state pension is means tested then so should every other 'benefit'. All of them.

@StarDolphins yws that’s another ideologixal
problem thats means testing is unfair

I think it stems in part from this odd notion in titan that government money is not the taxpayers money

when you take a pension or benefit you are taking money from other tax payers. Of course there are situations when that is entirely fair enough. But it can’t possibly be fair enough for every elderly person to take money from you get people just because they’re old regardless of your wealth

relyinf on the state should be the very last port or call

@Houseplanter many of them are means tested - but yes there should be much more means testing in the wwlfare
stste to ensure greater fairness